Question
Ellison Products is considering a new project that develops a new laundry detergent, WOW has estimated that the project's NPV is $3 million, but this
Ellison Products is considering a new project that develops a new laundry detergent, WOW has estimated that the project's NPV is $3 million, but this does not consider that the new la will reduce the revenues received on its existing laundry detergent products. Specifically, th estimates that if it develops WOW the company will lose $500,000 in after-tax cash flows d next 10 years because of the cannibalization of its existing products. Ellison's WACC is 10 What is the net present value (NPV) of undertaking WOW after considering externalities? O a. $2,927,716.00 O b. $3.000.000.00 O c. -$ 72.283.55 d. $2,807,228.00 O e. -$3,072,283.55
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